When a foreign company must register in South Africa
When a foreign company doing business in South Africa must register with CIPC as an external company, how quickly, and what the application needs.
By Achekam · · 5 min read · For Running a business businesses in South Africa
A company incorporated in Nairobi, Lagos, London or anywhere else signs its first South African customer. Soon it wants a local bank account to receive payment, it hires a salesperson in Johannesburg, and the directors fly in for a planning meeting in Cape Town. At no point did anyone decide to "set up in South Africa", yet by the end of that quarter the company may already be late with a registration it did not know it needed.
South African law treats a foreign company that carries on business in the country as an external company, and requires it to register with the Companies and Intellectual Property Commission (CIPC). This article explains what triggers the requirement, how long you have, what the application involves, and how to get your South African books started.
What counts as conducting business
CIPC says a foreign company that conducts business in South Africa must register as an external company. It gives examples of the activities that count: opening a bank account, holding meetings, and entering into employment contracts. CIPC links the list to section 23 of the Companies Act, 2008.
Those examples are ordinary. None of them requires an office, a warehouse or a South African subsidiary. A foreign company that employs one person in South Africa, or opens a local account to collect its receipts, should look at the question seriously rather than assume it is too small to be caught.
If your situation is borderline, for example occasional visits with no local contracts, take advice on how section 23 applies to the facts. The cost of a short consultation is small next to the cost of operating unregistered.
Twenty business days from the start
CIPC says the registration must happen within 20 business days of starting the activities. Business days exclude weekends and public holidays, so count from the date the first qualifying activity began and leave those days out.
In practice the activities often start before anyone in head office is aware of them. A useful discipline is to make "Do we need to register as an external company?" a standing question whenever the business does any of the following in South Africa for the first time:
- opens or applies for a bank account;
- signs an employment contract with someone working there; or
- holds a board or management meeting there.
Registering on e-Services and the documents you need
CIPC says external company registration is only available on its e-Services platform. It costs R400 at the time of writing, paid by card once CIPC's back office has approved the application.
The documents CIPC lists include a directors' resolution, the certificate of incorporation from the home country, which must be certified, and a securities register. Gather these before you start. The resolution in particular needs a board decision, and the original documents may have to come from the home jurisdiction, so they are usually the slowest part of the process.
CIPC's page on registering an external company sets out when registration is required, the platform to use, the fee and the documents, and it is the page to check for any change before you apply.
A short preparation checklist
- Record the date the first South African activity began, and work out the 20-business-day deadline.
- Obtain a board resolution approving the registration.
- Arrange certification of the certificate of incorporation.
- Prepare the securities register.
- Confirm whether any director or other individual involved is a foreign national (see below).
- Register on CIPC e-Services and keep the confirmation with the company's statutory records.
Foreign nationals and the Foreigner Assurance process
Many of the people behind an external company are foreign nationals. CIPC says that from 16 February 2024, foreign nationals must complete its online Foreigner Assurance process, providing a passport or foreign ID that must be certified, and that their beneficial ownership declarations are cross-checked against it.
That means each foreign individual who has to appear on CIPC's records should complete the Foreigner Assurance step early. A beneficial ownership declaration that does not match the assurance record is likely to hold things up.
After registration: filings and books
Registration is the beginning of the company's South African obligations, not the end. One difference from local companies is worth knowing. CIPC's step-by-step guide on annual returns says it is mandatory for companies, except external companies, and close corporations to submit either annual financial statements or a financial accountability supplement when filing annual returns. The guide carves external companies out of that particular requirement; it does not say they have no filing duties at all, so confirm with an adviser what your company must file each year.
Tax is a separate matter with SARS, not CIPC. If the company will pay SARS from an account outside the country, the route is explained in paying SARS from a foreign bank account. For a comparison with forming a South African company instead, see registering a company with CIPC.
Opening South African books in Achekam
Whatever the legal form, the South African operation needs its own records: what it sells, what it spends, who it pays. In Achekam, a business can sign up as a business rather than an accounting firm, choose its country, and get its own workspace, its own books and its own web address on the Achekam domain. The person who signs up becomes the administrator.
Each business has its own double-entry ledger with a standard chart of accounts created when the books first open. Accounts can be added, renamed or switched off, so the chart can be shaped around the external company's activities, for example separate accounts for amounts owed to or by head office.
The registration itself, the Foreigner Assurance step and any annual filings happen on CIPC's own platform, done by the company and its advisers.
Start the clock deliberately
Do not let the 20 business days begin by accident. Decide in advance which activity will be the first, register as soon as it happens or before, and keep the CIPC confirmation, the resolution and the securities register together where the South African team and its accountant can find them.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
